October 4, 2000

Patent Office director: My hands are tied

Author: JT Smith

By Grant Gross
Managing Editor

An often raucous debate on the effect of patents on the Internet ended Tuesday night with a leading cyberlaw expert calling for a moratorium on most business-related software patents and the director of the U.S. Patent Office saying Congress has tied his hands.

Lawrence Lessig, a Stanford law professor specializing in the Internet and advisor to the judge in the Microsoft anti-trust trial, argued that most developers of Internet-related software have worked in a culture where they built on each other's work and patents weren't considered. Those companies seeking hundreds of patents on software each year should have to prove those patents won't hinder the further development of the Internet, he said during a debate sponsored by D.C. Area Chapter of The Internet Society.

"People who are building the Internet clearly don't say they're building it on patent portfolios," Lessig fired at Q. Todd Dickinson, director of the U.S. Patent and Trademark Office and advisor to the Clinton Administration on intellectual property issues."If you genuinely are worried about what the consequences of different patent policies would be, you can recommend what Congress should do."

1,000 software patents in 2000

Dickinson had just defended the Patent Office's decision to issue 583 software business-method patents in 1999 -- the office is on pace to issue 1,000 this year -- by saying courts have ruled software and business methods are patentable. Congress had made no move to make software patents more difficult to obtain, he added, despite growing criticism that the office is issuing patents for business ideas that are unoriginal or already widely used. Dickinson was apparently unaware that two Democratic congressmen recently introduced a bill to reform the patent process.

"Sometimes, I wish I was a professor and had time to think about these things," said Dickinson, whose office issued 161,000 patents in 1999. "I've got an office to run, and I've got 1,500 of these applications coming in every day."

Dickinson saying the office is too busy to deal with the issue "seems to be an extraordinary indictment of our government-backed monopoly office," Lessig responded. "This is the most important part of our economy."

Earlier this year, the patent office has taken steps toward reform, Dickinson said, including outreach to affected technology groups, increased training for examiners, a "second-look" examination on software-related patents. Also, in November 1999 Congress passed a law requiring notice of most patent applications within 18 months of filing, when previously, the patent applications were secret until the patent was granted. Already, the Patent Office is rejecting 43% of business-method patents, compared to only 33% rejections of all patent applications.

Claps and boos

The partisan crowd of a couple hundred people seemed split along the panel's lines, with Lessig, technology book publisher Tim O'Reilly and moderator Vint Cerf, senior vice president of Internet architecture and technology for Worldcom, questioning the use of patents on the Internet. Defending patents were Dickinson and Jay Walker, founder of Priceline.com and holder of dozens of patents, including Priceline's bid-like sales model.

What started as a structured discussion turned into the panelists interrupting each other and a business-suit clad crowd clapping or booing. The discussion started with moderator Cerf, co-inventor of the TCP/IP protocol, saying the Internet protocol may have never caught on if he hadn't allowed it to be widely distributed. He threw the ball to the patent defenders by saying: "Any number of software patents have been granted over the last, let's say, 10 years, and a number of them appear to patents for what is widely-known technology that every undergraduate knows."

Walker rolled his eyes when O'Reilly and Lessig suggested the Patent Office should stop issuing software patents until a comprehensive study can figure out the potential harm to the growth of the industry.

Walker argued that patents create value for companies. "My concern here is that while we're busy having academics issue papers, the people who are creating jobs, the people who are creating value, and the economy as a whole seems to still be flourishing in the critical sector where the sky is falling," he said. "Those of us who are creating hundreds and thousands of jobs ... are here to tell you that if we slow this engine down because of the study groups you want to have, I'm not sure you're going to be well served in the economy."

Walker added: "The burden of proof is not for the people who defend property rights, but those who want to take them away."

Fencing off areas of development

O'Reilly, publisher of Open Source-related books and the only panelist not wearing a tie, said companies applying for patents aren't the only parties thinking they're defending their property. He compared the patent debate to the Old West struggles between farmers and ranchers. "The feeling of a lot of Internet developers who've been developing in the open-range model ... is you're taking away our property," O'Reilly said. "Once you fence off an area that's been open, we can no longer do some of the things that we used to do in that space. The lawyers are in effect hacking the hacker system."

O'Reilly received some of the loudest applause of the night -- and scattered boos -- when he said, "I'm concerned why we have a moratorium on Internet taxation, but not on Internet patents."

Lessig suggested that the Patent Office only allow "defensive" patents, to protect you from another person stealing your idea, on technology business methods while a comprehensive study is completed. The National Science Foundation has started such a study, Dickinson said.

"What we're talking about is whether this system will create innovation," Lessig said. "If [a study] says there's no good evidence this will increase innovation, why don't we remove the patent tax the software industry feels it has to go through?"

Walker called for Congress to stop siphoning close to a quarter of the patent fees away from the Patent Office, so that patent examiners can do higher-quality reviews of applications, and the Patent Office can build a better database of technologies that are already widely used and therefore, not patentable.

O'Reilly, who joined the patent debate when he opposed Amazon.com's patent on its one-click ordering system, agreed that the Patent Office needs to do better examinations of patent requests. "We in the industry need to come to grips with how to help the Patent Office do a better job," he said.

Click Here!